Analysis of the reasons for the popularity of CEL:
To make a simple analysis, I missed out on this wave of rising market because I didn’t pay attention to the token destruction event at the beginning. This is also normal, and those who missed out don’t need to feel bad, after all, “there is life, there is hope”.
Celsius is still in the bankruptcy reorganization stage, and the specific situation will have to wait for the results of the hearing on May 7, which will take about one week to three months.
Previously published data showed that Celsius had total assets of US$4.3 billion, liabilities of US$5.5 billion, and a funding gap of US$1.2 billion.
In mid-2023, Celsius filed an application with the court to inject $220 million to establish a new Bitcoin mining company, and the mined Bitcoins will be used to repay debts.
Celsius will destroy the vast majority of tokens under its control by filing an application with the court in September 2023.
Judging from the team's performance, the solution to the debt problem is relatively positive, but I personally believe that the Cel token is not a benign asset. When it was listed during the bull market in 2021, the value of the token was obviously overestimated, with the highest price reaching US$8. It only took one year from the listing of the Cel token to Celsius's filing for bankruptcy liquidation. As of April 30 of this year, compared with the peak price of US$8 in 2021, it has fallen by more than 95%.
Secondly, the halving of Bitcoin will have an impact on the income of all miners, and of course it will also have an impact on the mining business of new companies (I personally think that selling computing power will be more stable than mining by yourself). If the price of Bitcoin falls below the shutdown price, then in a short period of time, they may face the risk of shutdown or loss.
Secondly, the token destruction was applied for in September 2023. The 652 million tokens to be destroyed on October 12, 2023 have been collected and are no longer circulated in the market. And the destruction was carried out at around 1 am on May 1, 24.
When such a "big event" occurs, foreign funds obviously do not approve of these actions and do not buy into them, because the first round of major price changes occurred during the daytime in Asia. I personally am skeptical about the idea of increasing market valuations by destroying a large number of tokens. Do you want to step on your left foot and reach the sky?
The second is the basic situation of the market. From October 30, 2023 to April 30, 2024, the total transaction volume of Cel spot was 439 million pieces. (The possibility of market making is not ruled out)
Therefore, it is not difficult to complete the accumulation of funds during this period. This data is also quite good. In the 160 days after the listing date in 2021, the trading volume was only 44 million pieces.
However, from May 1 to May 10 this year, a huge amount of tokens were released in just ten days, with a trading volume of 438 million. There is a high probability that most of the trading volume is due to someone making a market, constantly transferring tokens from one hand to the other, creating a hot market phenomenon.
Therefore, we can conclude that there is actually no large capital inflow into the spot market, but the hot money flows into the contracts.
This conclusion is also based on data. In the 40 days from August 7 to September 16, 2022, when the price surged, the total contract turnover was 2.832 billion US dollars. In the ten days from May 1 to 10 this year, the total contract turnover reached 2.685 billion US dollars, with an average daily turnover of about 200 million US dollars. This data is much higher than the top 20 currencies except for the market value ranking, which shows how popular it is.
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